Prairie State Wire

Around the nation, lawmakers, regulators, and labor organizations have worked to define W-2 and 1099 workers beyond the ridesharing and delivery app companies. The latest effort includes a growing healthcare staffing app industry, which is crucial as our population gets older.

As the demand for healthcare services grows, many healthcare facilities and staffing agencies are turning to apps and other digital platforms to connect with healthcare workers and fill open positions. 

One of the biggest challenges of the app-based healthcare staffing model is determining how to classify healthcare workers. Many healthcare staffing apps operating in Illinois and throughout the country classify their healthcare workers as independent contractors rather than employees, which means they are not entitled to the same benefits and protections as traditional employees. 

While these apps can be effective in bridging the healthcare gap, worker misclassifications have the potential to create new legal challenges for workers, healthcare facilities, and employers alike.

Right here in Illinois, with the passage of HB 4666 (2022), the healthcare industry has been the target of reforms now in place, specifically concerning emerging healthcare staffing apps. The companies creating these staffing apps have received hundreds of millions of dollars in venture capital. They are expanding rapidly throughout the United States.

This month, healthcare staffing agencies are required to submit quarterly reports to the Illinois Department of Labor that include information about the average amount charged to healthcare facilities, the average amount paid by the agency to employees, and the average amount of labor-related costs paid by the agency for each employee category. This includes payroll taxes, workers' compensation insurance, professional liability insurance, credentialing and testing, and other employee-related costs.

This change marks a significant step towards defining the rights of nurses and other healthcare workers by amending the Nurse Agency Licensing Act. The new provisions in HB 4666 also contain provisions prohibiting nurse staffing agencies from imposing non compete covenants on nurses and certified nurse assistants. This means healthcare workers can work for other healthcare facilities and agencies without fear of legal action or penalties.

The Illinois Department of Labor notes that reporting requirements in HB 4666 are designed to increase transparency and accountability in the healthcare staffing industry and to ensure that healthcare workers are being paid fairly and receiving the benefits and protections they are entitled to.

HB 4666 was seen as a significant victory for healthcare workers in Illinois. With so many other states dealing with their healthcare worker misclassification issues, HB 4666 will be a part of the discussion as they look to figure out staffing misclassification with healthcare staffing apps. 

Ultimately, it is in the best interest of healthcare workers, employers, and staffing app companies to work together to establish clear definitions of worker classifications, increase transparency and accountability, and ensure that healthcare workers receive the benefits and protections they need to do their jobs safely and effectively.

If not done right, worker misclassifications in the healthcare staffing app can create a goldmine of cases for the legal profession. 

While healthcare staffing apps are the big focus now, it would be prudent for any business with 1099 contractors to audit itself. Ask yourself some tough questions. How should I classify these workers? Am I violating labor laws? Am I treating them as contractor workers when they should be employees? 

My role with the Small Business Administration was to help companies and business owners survive and thrive. But too often, I witnessed companies opening themselves up for legal liability they could have avoided. So do yourself a favor – whether in healthcare or another industry – protect yourself by reviewing and adjusting your arrangements with your contract workforce as necessary.

Michael Vallante provides consulting and strategic communications services for small businesses and non-profits around the country. From 2017-20, Vallante was the US Small Business Administration's Associate Administrator for the Office of Field Operations, overseeing the 68 district offices around the country and the management of SBA's capital, contracting, and counseling programs serving small businesses.